Part 14Income tax liability: miscellaneous rules
F1Chapter A1Remittance basis
Remittance of income and gains: transfers from mixed funds
809RSection 809Q: composition of mixed fund
(1)
F2Subsections (2) to (8) apply for the purposes of step 1 of section 809Q(3) (composition of mixed fund).
(2)
Treat property which derives wholly or in part (and directly or indirectly) from an individual's income or capital for a tax year as consisting of or containing that income or capital.
(3)
If a debt relating (wholly or in part, and directly or indirectly) to property is at any time satisfied (wholly or in part) by—
(a)
an individual's income or capital for a tax year, or
(b)
anything deriving (directly or indirectly) from such income or capital,
from that time treat the property as consisting of or containing the income or capital if and to the extent that it is just and reasonable to do so.
(4)
Treat an offshore transfer from a mixed fund as containing the appropriate proportion of each kind of income or capital in the fund immediately before the transfer.
“The appropriate proportion” means the amount (or market value) of the transfer divided by the market value of the mixed fund immediately before the transfer.
F3(4A)
For the purposes of subsection (4)—
(a)
TRF capital is to be treated as a kind of income or capital, and
(b)
TRF capital is not to be regarded as any other kind of income or capital.
(5)
A transfer from a mixed fund is an “offshore transfer” for the purposes of subsection (4) if and to the extent that F4neither section 809Q nor section 809RZA(2) applies in relation to it.
(6)
Treat a transfer from a mixed fund as an “offshore transfer” (and F5neither section 809Q nor section 809RZA(2) as applying in relation to it, if they otherwise would do) if and to the extent that, at the end of a tax year in which it is made—
(a)
F6neither section 809Q nor section 809RZA(2) applies in relation to it, and
(b)
on the basis of the best estimate that can reasonably be made at that time, section 809Q will not apply in relation to it.
(7)
In this section ‘mixed fund’ means money or other property containing or deriving from—
(a)
more than one of the kinds of income and capital mentioned in section 809Q(4), F7...
(b)
income or capital for more than one tax year F8, or
(c)
income or capital that is TRF capital and income or capital that is not TRF capital.
(8)
If section 809Q applies in relation to part of a transfer, apply that section in relation to that part before applying subsection (4) in relation to the rest of the transfer.
(9)
If section 809Q applies in relation to more than one transfer from a mixed fund, when undertaking F9steps A1 and 1 in relation to the second or any subsequent transfer take into account the effect of F10steps A1 and 2 of section 809Q(3) (composition of transfer) as it applied in relation to each earlier transfer.